2006–2010

Microdata Evidence on Rent-Sharing

Särtryck nr 2009:31

Författare: Mahmood Arai och Fredrik HeymanÅr: 2009 Publikation: Applied Economics Årgång (nr): 41 (23) Sidor: 2965–2976
Artikeln online (behörighet kan krävas)


We examine the effect of firm profits on wages for individual workers while focusing on the empirical complications associated with estimating the extent of rent-sharing. Controlling for worker and firm fixed-effects and using several instruments to deal with the endogeneity of profits, we report results indicating that Ordinary Least Square (OLS)-estimates strongly underestimate the effects of profits on wages. Moreover, the effect of profits on wages are estimated separately for firms with increasing and decreasing profits within a given time period. We find a positive and stable effect only in firms with increasing profits. This is in line with the idea that falling profits do not lead to wage cuts while increasing profits imply higher wages.


Referens:
Arai, Mahmood och Fredrik Heyman (2009), "Microdata Evidence on Rent-Sharing". Applied Economics 41(23), 2965–2976.

Fredrik Heyman

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fredrik.heyman@ifn.se

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Henrik Horn

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